Grassley says states may not get all they want

The nation’s governors are asking the federal government for at least 40-billion dollars to overcome health care challenges and another 136-billion for infrastructure projects, like repairing roads and bridges.

Iowa Senator Chuck Grassley says Congress is working to assemble an economic recovery plan for the states, but Uncle Sam won’t be able to shell out money to cover everything the governors want.

"We’re going to have a stimulus package and upfront, state and local governments are going to be asking for some money. I don’t know where that ends and not every state is in the same financial condition as the others and some that are in bad financial condition, it’s because of their own fiscal irresponsibility and not because of the downturn in the economy," Grassley says.

The tentative plan is to have the package passed by Congress over the next few weeks so it’s ready for President-elect Barack Obama to sign right away when he takes office in January. Given its wide scope, Grassley says it won’t be a simple piece of legislation to assemble.

Grassley says, "With 50 different states there’s probably 50 different problems or there might be 50 different states with 30 different problems, how to deal with it? I think when it comes to a stimulus package, there may be a little help for states."

There had been talk of a second set of economic stimulus payment checks being set to taxpayers nationwide, but it’s still not clear how much of an impact the last batch had. Now that the nation is officially in a recession, Grassley says swift action is necessary, but the money needs to be properly allocated.

"The bigger issue is going to be how much do we do to stimulate the national economy and to do it through federal expenditures and to do it through a way that maybe stimulates the economy through infrastructure, although that’s less to my liking," Grassley says. "More important to me is tax policy that will encourage investment and longterm creation of jobs."

The states are suffering as the national economic slowdown has meant a significant drop in state tax revenues.